Generous alumni donations can affect college rankings — and their prestige

Among the crush of solicitations from nonprofits we’ve come to expect in our inboxes during the holiday season, one stood out in particular to Rachel Fishman this year.

“Keep Our Rankings High” read the subject line of the email from her alma mater, the University of Wisconsin.

As a higher education policy expert — Fishman is the deputy director for research and the education policy program at New America, a think tank — she’s given a lot of thought to rankings, the oft-maligned arbiter of college quality found annually in U.S. News World Report and other publications.

“When I get such a brazen email that is basically saying this is a way we are gaming the rankings…it just didn’t sit well with me,” Fishman said.

Rankings have been under scrutiny in recent years

The email highlights a relationship well understood in the higher education universe, but little discussed in the mainstream. Broadly, a college’s success at reeling in philanthropy can impact its prestige. More specifically, U.S. News World Report’s Best Colleges, the most prominent college ranking, weighs alumni donor participation in evaluating a school.

The share of alumni who donate represents 5% of U.S. News’ formula, a fraction of the weight the company gives to outcome measures, like graduation and retention rates and social mobility, which account for 35% of the formula, Robert Morse, the chief data strategist at U.S. News, wrote in an email. The donation rate is meant to serve as an indirect measure of graduates’ satisfaction and engagement with their schools, he wrote.

The share of alumni who donate represents 5% of U.S. News’ formula, a fraction of the weight the company gives to outcome measures, like graduation and retention rates and social mobility, which account for 35% of the formula.

But the relationship between donations and rankings also emphasizes the ways in which well-resourced colleges are in a better position to compete and continue to pull in more resources.

“What does that metric tell you about the quality of your degree? Or the return on investment?” Fishman said of the share of alumni giving. Instead, it’s likely simply a signal that the school probably had many strong (and perhaps wealthier) students coming in, with a relatively good chance of success — and money to donate — when they leave, she added.

The schools that educate the wealthiest students get the most donations

The U.S. News rankings have come under increased scrutiny over the past few years, including from U.S. Senators, over claims they incentivize colleges to be more selective — which often means competing for and catering to students who would likely be successful no matter which college they attend — at the expense of students for whom a college degree could be truly transformative.

At the same time, the schools that admit a wide swath of applicants and in many cases alter their trajectory with limited resources at their disposal are rarely rewarded for their efforts, critics say.

A similar dynamic exists in college philanthropy. It’s the best-resourced schools educating the most prepared — and in many cases, wealthiest — students who nab the bulk of donations to colleges. At the same time, community colleges and other regional schools doing the yeoman’s work of educating America’s students often struggle to raise funds.

At U.S. News-ranked schools, only about 11% of alumni donate

The relationship between donations and rankings may reinforce the troubling trends in both areas.

At most colleges, a relatively low percentage of alumni donate (the average for all U.S. News-ranked schools is roughly 11%), and it’s not a great measure of how satisfied students were with their alma mater, said Robert Kelchen, a professor at Seton Hall University who focuses on higher education finance.

For example, the rate is the percentage of alumni a school has records for that donate to the school, which means it’s unlikely students who were unsatisfied with the school are included in the calculation, he said.

“Alumni giving rates probably become less and less valuable as colleges try to do everything they can to increase the rates,” Kelchen said. “It seems like most of these alumni donation pushes are from schools that are already fairly wealthy and well-resourced and have the alumni offices to reach out.”

“Alumni giving rates probably become less and less valuable as colleges try to do everything they can to increase the rates.”

Robert Kelchen, Seton Hall University

For most schools, moving up in the rankings isn’t a major priority of their development strategy, said Linda Durant, the vice president of development at the Council for Advancement and Support of Education, a membership organization that serves professionals in the advancement and development sectors of education institutions.

Indeed, at the University of Wisconsin-Madison, the rankings-themed email was one of nine different messages the school sent to alumni during its fall campaign, Tod Pritchard, a spokesman at the Wisconsin Foundation Alumni Association, wrote in an email. Other messages sent to alumni featured themes like the importance of philanthropy to maintaining Wisconsin’s traditions and level of excellence and the impact the funds have on the student experience. The rankings message performed about average, Pritchard wrote.

Rankings can be a strong motivator for younger alumni

Rankings and other types of competition can be a particularly strong motivator for young alumni to donate, Durant said. Because this group may be struggling with student debt and other financial challenges that come with being early in your career, the idea that they can contribute to the school’s success without donating a huge amount of money can be appealing, she said.

Building a relationship with this group is especially important for colleges. If the schools are able to get them in the habit of giving, even small amounts, consistently, that could lead to larger donations in the future, experts say.

But it’s possible for a rankings-themed pitch to backfire, even with alumni who aren’t as savvy as Fishman, said Jonathan Meer, an economist at Texas AM University who studies charitable giving.

‘I was all geared up to help kids with financial aid and help advance science and here you are talking about what’s in it for you. For some people that’s going to be a turn off.’

— Jonathan Meer, an economist at Texas Aamp;M University who studies charitable giving

“It detracts from the intrinsic motivation,” that a donor may have for giving, he said. It’s easy to imagine some recipients thinking “I was all geared up to help kids with financial aid and help advance science and here you are talking about what’s in it for you,” he said. “For some people that’s going to be a turn off.”

For some though, competition can be a compelling motivator. Thomas Harnisch, the director of state relations and policy analysis at the American Association of State Colleges and Universities, sent a tongue and cheek tweet after receiving the Wisconsin email indicating that defeating rivals Ohio State University and the University of Michigan in the rankings could push him to donate.

“It’s a way to draw people in,” he said. “Like anything in sales and fundraising you need to clearly describe a problem and create a sense of urgency and rankings and rivalries can do that for some alumni.”

Very effective email fundraising effort from @uwmadison reminding alumni that our giving rate is below Ohio State and U of Michigan.

As a higher education policy expert, Harnisch said he also sees why some view the rankings as “superficial or even counterproductive.” But he’s particularly concerned about the finances of public colleges in states like Wisconsin, where state lawmakers have pulled back on funding their higher education institutions. Anything schools can do to convince people to make up that shortfall is useful, he said.

“Philanthropy is incredibly important,” he said. “Universities are going to be looking for angles to try to get people to donate and rankings and how the university stacks up with their rivals is one approach to doing that.”

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Jillian Berman covers student debt and millennial finance. You can follow her on Twitter @JillianBerman.